U-M affiliated health system acquiring 3 Ascension hospitals

Kristen Jordan Shamus

Midland-based MyMichigan Health announced this week it plans to acquire three Ascension Michigan hospitals in Saginaw, Tawas and Standish, along with a nursing home and stand-alone emergency department/surgery center.

The deal, which it is calling a “definitive agreement,” will expand the health system’s footprint to include a total of 11 medical centers with 12,500 employees in the Saginaw Bay region, and the mid- and northwestern Lower Peninsula.

“We are not able to disclose the terms until the deal is completely closed, which we’re anticipating will be sometime middle to end of June,” said Dr. Lydia Watson, president and CEO of MyMichigan Health.

The following Ascension Michigan properties will fold into MyMichigan Health as part of the agreement:

Ascension St. Mary’s Hospital in Saginaw, a 268-bed level II trauma center with 24hour emergency care and a comprehensive stroke center.

Ascension St. Mary’s Towne Center in Saginaw, which offers 24-hour emergency care along with an ambulatory surgery center, wound care center and short-stay facility.

Ascension St. Joseph Hospital in Tawas, a 47-bed acute-care hospital that offers 24hour emergency care and includes a heart center, an imaging center, a joint-replacement center, childbirth services and a surgery center.

Ascension Standish Hospital, a 25-bed critical access hospital in Standish. This also includes all related offices and physician practices of Ascension Medical Group and Ascension Standish Skilled Nursing Facility, and 29-bed skilled nursing facility.

All Ascension Michigan physician practices in the region, which includes about 160 total providers.

“Our goal is to try to keep care local, and by joining with these Ascension groups, it helps us to expand into that region and it helps us to continue to provide quality care,” Watson told the Free Press on Wednesday.

No job losses expected

Adding Ascension’s patients to the MyMichigan Health’s system, “helps us to be stronger and to support the infrastructure that we already have in place,” she said, especially when it comes to specialty care. “With the extra patient volume, we’ll be able to, in particular, support our cardiovascular program and our neuroscience program.”

Current Ascension employees aren’t likely to lose their jobs as part of the deal, Watson said, and MyMichigan has no current plans to close any of the facilities.

“In general, we don’t anticipate any job loss,” Watson said. “We are committed to strengthening recruitment and retention of

all the employees and providers and that is going to help us to enhance the community’s access to local care.

“In fact, there is a possibility that we may even be adding positions to the local communities to support positions that were previously provided by Ascension corporate,” Watson said of the nonprofit Catholic health care system based in St. Louis.

“There were many services that were run through corporate out of St. Louis. Those were employees down in St. Louis, not necessarily up in Saginaw, Standish or Tawas.”

Ascension’s deals face regulatory scrutiny

This is the second deal Ascension has made with another health system in Michigan to consolidate its hospital services in the last year.

In October, Henry Ford Health announced it signed an agreement to join with Ascension Michigan and Genesys to create a $10.5 billion health system based in Detroit with 13 acutecare hospitals, roughly 50,000 employees and more than 550 sites for regional health care. Robert Riney, Henry Ford’s president and CEO, is to lead the newly combined organization, which would remain headquartered in Detroit and carry Henry Ford Health’s name and branding.

However, Ascension Michigan’s deals both with Henry Ford and MyMichigan Health must undergo regulatory review before either can be completed.

The U.S. Department of Justice, the Federal Trade Commission and the state Attorney General’s Office all have regulatory oversight to protect consumers, who can suffer from higher prices, job cuts, hospital closures and poorer quality of care when competition within a market is limited by consolidation.

In December, the Federal Trade Commission and U.S. Justice Department adopted tougher antitrust rules for mergers and acquisitions, including those in health care. The rules prohibit mergers and other deals that increase concentration in highly concentrated markets or eliminate competition; the agencies have blocked other recent mergers between health systems in other states.

Danny Wimmer, press secretary for Michigan Attorney General Dana Nessel, told the Free Press on Wednesday: “The Department is reviewing the Henry Ford/Ascension matter and likewise expects to review the Ascension/ MyMichigan matter under its charitable trust and antitrust authority.

“Unfortunately, unless and until a lawsuit is filed, the attorney general is generally precluded by law from disclosing matters related to its antitrust investigations.”

This is just the latest in a spate of hospital consolidation announcements in Michigan in recent years. A Free Press analysis of hospital ownership found that mergers, acquisitions and other consolidatory deals have touched more than 50 hospitals since 2021, affecting more than 150,000 health care workers and millions of patients.

These types of agreements generally save health systems money. The larger their market share, the more leverage a company has to negotiate reimbursement rates with private insurers, negotiate better prices for supplies and services and manage low Medicaid and Medicare reimbursements, said Allan Baumgarten, a Minneapolis-based health care analyst who has published the annual Michigan Health Market Review since 1997.

“The MyMichigan deal mirrors what Ascension did in Wisconsin two years ago, when it transferred seven small hospitals to Aspirus Health of Wausau, Wisconsin,” Baumgarten said.

“Ascension is less interested in being a rural provider and is focusing on specific urban markets where it is in the top two or three largest provider systems. And even then, like in Milwaukee, it is focusing any new investments in facilities on growing suburban areas and with microhospitals, not full-size inpatient facilities.”

If both Ascension Michigan’s deals with the Henry Ford Health and the MyMichigan Health are completed later this year, it will leave Ascension with just four properties in Michigan — all in the southwestern part of the state: Ascension Allegan Hospital in Allegan Ascension Borgess Hospital in Kalamazoo Ascension Borgess-Lee Hospital in Dowagiac

Ascension

Plainwell

Ascension is among the nation’s largest health care providers, reporting it had 139 hospitals and 40 senior living facilities in 18 states at the end of December. Though it was financially struggling in 2022 and early 2023, reporting a net loss of $2.66 billion, the health system was able to turn around its finances in recent months. It reported an income of $359 million for the six months ending in December.

Among the other big hospital deals in recent years in Michigan:

Borgess-Pipp

Hospital

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In 2022, Beaumont Health and Spectrum Health came together to create of the state’s largest health system, Corewell Health, which now has 21 hospitals with 5,000 licensed beds and 65,000 employees across most of the Lower Peninsula. That deal included Priority Health, an insurance plan with more than 1.3 million members. It now has 21% of the state’s health care market share, Baumgarten told the Free Press for a previous article.

In 2023, the University of Michigan Health finalized its agreement with Lansingbased Sparrow Health, forming a $7.8 billion hospital network with 46,000 employees and 11 hospitals stretching from Ann Arbor north to Carson City and west to Grand Rapids. The deal included Sparrow’s Physicians Health Plan, which at the time had 70,000 members and 300 employers in Michigan, as well as a Medicare Advantage plan. It now has 15.4% of the statewide health care market share.

Although MyMichigan Health is considered a separate business organization from the University of Michigan Health, the two organizations share a clinical affiliation and business partnership; MyMichigan Health also uses UM’s branding and logo.

“They have a minor ownership in us,” Watson said, adding that U-M’s famous block M logo and branding can only be used by MyMichigan Health if it meets the standards and criteria for safety, credentialing and quality of care required by Michigan Medicine.

All of the Ascension properties that are to be acquired under this new deal also would eventually be renamed and rebranded, Watson said, with the MyMichigan Health name and the U-M block M branding.

Contact Kristen Shamus: kshamus@freepress.com. Subscribe to the Free Press.